Software's game of mutually assured damage

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Monopolies are the only way to make real money these days, and patents are fantastic because they allow you to establish legal monopolies.

That's what the company lawyer told a packed room of software engineers, including one who submitted to me a revealing confession. For reasons that will become obvious, he prefers to remain anonymous.

This is what the software engineer related to me:

The lawyer went on to explain that since what was important was the monopoly, it was necessary not only to patent the way we were doing things, but also to think laterally, and patent all the ways other people might do them as well, not so that we could actually do these things ourselves, but so we could prevent others from doing them.

We are a large software house, part of one of the world's largest software companies, writing leading edge security software, and this talk went down like a ton of bricks with the local engineers.

"Don't worry about whether you think the idea is worthy of patenting - that's for us to decide," the lawyer went on.

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Normally for a patent to be worth filing, it has to be original and inventive. However, the United States patent office is deluged with applications, and largely rubber stamps anything that looks plausible. The feeling is that anything contentious can be sorted out in the courts.

This is something that causes annoyance to software engineers as more and more ridiculous patents are granted, but the lawyers are fairly comfortable with situation. "Look, if the examiners were any good they'd be in industry, so you don't have too much to worry about," the lawyer told me privately.

The whole idea of software patents is a bit strange, really. A traditional patent is for a mechanical invention that may have taken a long time to design, produce and bring to market, and provides protection for the original inventor while eventually allowing their ideas to enter the public domain.

Software, however, is mercurial. A good programming idea may only be useful for a few months and, even after the dotcom crash, it's still the case that after a couple of years generally there is a complete generational change in the tools, techniques and even programming languages used.

What's more, it is usually the implementation of an idea - the actual computer program - which is most useful, and that is already covered under copyright law.

Patents on software often appear completely counterproductive - by monopolising a technique, a patent can simply ensure that the technique is never used. Rather than making money, a patent can cause the death of an otherwise promising technology, and this is frequently the aim of patents held by owners of threatened technology.

It's a curiosity of the industry that the areas where there are no patents, such as the original internet, the world wide web and the "open source" movement, usually show the fastest innovation and progression.

Today a software patent is often the modern equivalent of an old-fashioned robber baron setting up on a public highway and demanding a toll from all who pass. Usually it's cheaper simply to take another road (hence the need to patent all those other solutions!)

It's not purely predatory, though. There is also a defensive element to the patent business, and this is the slippery slope that led to my becoming a rabid patenter myself.

Recently my firm was taken to the cleaners in a US court case by another firm over software that we'd been developing and selling for years, but hadn't patented. The other company did file patents, there was some difficulty definitively proving dates, and the firm lost a lot of money.

So we got another round of emails encouraging us to file patents, as a way of defensively time-stamping some of our work, and offering attractive bonuses for doing so. My area is particularly "bleeding edge", and my manager pointed out that we'd look pretty stupid if our everyday activities were patented by a rival.

So a colleague and I sat down for a few hours one afternoon, and tossed off six fairly straightforward ideas, of the sort that any competent worker in our field might come up with. The lawyer was delighted, but insisted on splitting one of our ideas in two, so then we had seven patents being filed in our names.

Having got into the swing of things, we sat down for a couple of hours again the other day, and tossed off another 10. So far they have all been accepted and filed by the firm's lawyers, which on a time-per-patent basis puts us well in front of Thomas Edison, who I believe previously held the record.

Since we receive a bonus of $8000 per patent, if all goes well we'll share well over $150,000. And there seems no reason we can't keep this game up indefinitely. We should be able to manage around 50 a year, and this nice little earner will see the mortgage paid off in no time.

Meanwhile, the firm spends between $50,000 and $200,000 on legal fees and filing fees for each patent, so we've created over $1 million worth of employment for our legal friends. This is money that the company can't spend on research and development, but there you are.

The company isn't being stupid here, though. It must know many of these patents are of dubious value. But all the large software firms have big patent portfolios and they mainly go unused, in a sort of "mutually assured destruction" arrangement whereby each large firm is prevented from using their patent portfolio by fear of devastating reprisals.

This leads to an interesting paradox. The vast majority of software patents are unused, because people who actually make things often can't afford the risk of using them. Generally, software patents are only used to keep down small company competition, as defence, or by firms that have nothing to lose.

The last includes professional "intellectual property portfolio holders" (who don't produce anything themselves, and are therefore immune to reprisals) and companies that are facing certain demise in their traditional business, and so try to extract value from their existing intellectual property.

Software patents, and their accompanying monopolies, have done immeasurable damage to the world of computer programming, and are one of the reasons the centre of innovation has moved either to open source software, or to corporate working groups where everyone agrees to automatically cross-license all their patents to each other - thus forming a patent oligopoly rather than a patent monopoly.